Supplemental Needs/Special Needs Trust

The purpose of a special needs trust is to establish a fund for the benefit of a person suffering from a severe and chronic or persistent disability; it is a supplement to, not a substitute for, government benefits. The fund pays for the unique, long-term needs of the beneficiary and aims to afford him or her the best lifestyle possible under the circumstances.

All of the requirements for creating a valid trust in New York apply to supplemental needs/special needs trusts. In addition, the trust documents must recite specific provisions required by New York law. If properly drafted, the assets of the trust cannot be counted for purposes of determining eligibility for government benefits or assistance.

Who may create a supplemental needs trust?

A person with legal responsibility for another person may create a special needs trust; traditionally, they were created by parents for their disabled child. However, a person without legal responsibility for the beneficiary may create a “third person supplemental needs trust” using a will or express trust, and so long as the third person gives complete control over the assets to the trustee, the government will not count the trust assets for purposes of determining eligibility for benefits.

A disabled person may also create a supplemental needs trust for his own benefit, but any assets left when he dies must be used to repay the state for benefits received.

I would like to establish a supplemental needs/special needs trust:

Determine how you will fund the trust.

Gather relevant documents about the property you would like to place in trust.

Get in touch with an experienced estate and trust lawyer.

Changes may occur in this area of law. The information provided is brought to you as a public service with the help and assistance of volunteer legal editors, and is intended to help you better understand the law in general. It is not intended to be legal advice regarding your particular problem or to substitute for the advice of a lawyer.

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